“Why should the state invest money in your project if the local jurisdiction isn’t providing funds to that project? Why should the state consider it a priority if you don’t?”

If the municipality is not willing to demonstrate the importance of the TOD by diverting local funds to the project in lieu of other initiatives, the state is not likely to consider the TOD a priority for its funds, either.

Common Pitfalls

Development projects, particularly TODs, are difficult to achieve under the best of circumstances. There are a multitude of things that can derail a project, some of them before you even get started. Here are some of the more prevalent problems that can be encountered and ways to circumvent potential pitfalls.

1: Partnerships

Multi-agency coordination is essential for the completion of TOD. Usually the local jurisdiction takes the lead on these types of projects and has to coordinate with several agencies to obtain approvals, funding or other support. Here are generally some of the partners that will need to collaborate to complete a TOD initiative:

Municipality

Transit agency

City and/or County planning agency

State Department of Community and Economic Development

State Department of Transportation

Local, state and federal elected officials

Property owners

Private developers

Funding sources

Utility companies

TOD projects that successfully engage and coordinate multiple partners are usually those that are looked upon favorably when it comes to receiving public funds and other support. However, it can be difficult to engage and motivate agency partners over the long haul. The key is to involve partners early in the process and often, creating interest, buy-in and accountability from the project’s earliest phases.

2: Funding

There is no pot of money on any level —local, state or federal—set aside and dedicated to TOD; not for planning, not for construction, not for anything. Public funding for TOD will most likely come from a variety of sources that have to be cobbled together to fill gaps in the project’s budget. For example, a TOD project currently underway in Southwestern Pennsylvania is using seven county and state funding sources, all of which took 10 years to identify and obtain. Those sources included:

Community Development Block Grant (CDBG)

Growing Greener II

Housing & Redevelopment Assistance (HRA)

PennDOT Economic Development Fund

Redevelopment Assistance Capital Program (RACP)

Regional Economic Development District Initiative Program (REDDI)

Tax Increment Financing (TIF)

These funds, as with most public funding sources, are heavily competitive and difficult to obtain. It is important, therefore, to engage local and state officials to support the project and promote its importance to those representing and approving funding sources and grant programs. Continuous follow up and collaboration with source representatives is imperative.

3: Time

Development projects can be difficult to achieve under the best of circumstances; the various local approval processes take time and money. TOD, which is usually led by the public sector and funded in part by public monies, is even more onerous. Public agencies are stepping outside of their core businesses when they undertake a TOD and typically don’t have the range of skill sets or focus to complete real estate deals and development. Publicly led development projects usually face more scrutiny and approvals than most other development projects. For example, TODs undertaken by a transit agency or using transit agency property must be reviewed and approved by the Federal Transit Administration (FTA), a process that could take a year or more to complete.

Because TOD projects take time, it is important to prepare for that inevitability by undertaking measures to mitigate and simplify processes. Align yourself with a partner that has already completed a development project—like your city or county planning entity— and has written grants and understands procedures. Develop a scope of work, budget and timeline for planning and soft-cost activities that is both precise and prudent. Keep local and state government officials aware of your project and provide them with consistent updates so that when inquiries are made they can speak supportively on behalf of the project. And seek advice from experts like other planning officials, engineers, real estate professionals, attorneys, funding sources and regulatory agencies.